Marvel Alder Lucy Aspera Erica Millan Tiffany Suh

1. Managed Health Care Marvel Alder Lucy Aspera Erica Millan Tiffany Suh

2. Introduction Managed Care health insurance offers low cost moderate health care coverage. It’s a system that controls the financing and delivery of health services to members who are enrolled in a specific type of healthcare plan. The goals of managed health care are to ensure that... • providers deliver high-quality care in an environment that manages or controls costs. • the care delivered is medically necessary and appropriate for the patient’s condition. • care is rendered by the most appropriate provider. • care is rendered in the most appropriate, least-restrictive setting.

3. Introduction Cont. The basic concept behind managed health care is to lower cost by means of control, by controlling access to providers the costs are controlled as well

4. Costs Involved • Monthly health insurance premium • Co-payment • Cost depends on whether you’re in-network or out-of-network.

5. Different types of health coverage: • Health Maintenance Organization (HMOs) • Preferred Provider Plans (PPOs) • Medical Savings Plan (MSP) • Point of Service Plans (POSs)

6. HMO’s • A Health Maintenance Organization (HMO) is an organized system of health care that provides comprehensive services to its members for a fixed, pre paid fee. • HMOs are the least expensive form of managed medical care.

7. About HMO’s • HMO's account for a significant share of the group health insurance in the market, in 2001, enrollment in HMO's accounted for 33 percent of all employee enrollments in health insurance plans.

8. How HMO’s Work • The member picks a provider • A list is set up of the physicians that are covered under the HMO plan and from there the member picks their primary care physician. • The primary care physician must refer a patient out in order to see a specialist.

9. Types of HMO’s There are four types of HMO’s • Staff Model- physicians are employees of the HMO and are paid a salary and possibly and incentive bonus to hold down costs. • Group Model -physicians are employees of another group that have a contract with an HMO to provide medical services to its members. The HMO pays the group of physicians a monthly or annual capitation fee for each member. In return, the group agrees to provide all covered services to the members during the year. The group model typically has a closed panel of physicians that requires members to select physicians affiliated with the HMO

10. Cont. Types of HMO’s • Network Model -the network contracts with two or more independent group practices to provide medical services to covered members. The HMO pays a fixed monthly fee for each member to the medical group. The medical group then decides how the fees will be distributed among the individual physicians. • Individual Practice Association (IPA) -is an open panel of physicians who work out of their own offices and treat patients on a fee for service basis. However, the individual physicians agree to treat HMO members at a reduced fee.

11. Advantages of HMO’s • Most services are covered in full with relatively few maximum limits on individual services. • Covered services typically include the full cost of hospital care, laboratory and X-ray services, outpatient services, special-duty nursing, and numerous other services • Office visits to HMO physicians are also covered, either in full or at a nominal charge for each visit. • Some newer HMOs allow insured's to select any physician at higher out-of-pocket costs.

12. Cont. Advantages of HMO’s • HMO members pay a fixed, prepaid fee (usually paid once a month) for the medical services provided. • Because of this fixed pre-paid fee it is in the providers best interest to make sure that the beneficiaries get basic health care for problems before they become serious. This means that beneficiaries get good preventive care through HMO plans. • High deductibles and coinsurance requirements are usually not emphasized. • The big advantage of HMO’s is that there is a huge emphasis on controlling costs.

13. Disadvantages of HMO’s • A big disappointment to many members is that the selection of physicians is usually limited to physicians who are affiliated with the HMO • There is a limit to the amount paid for the treatment of alcoholism and drug addiction and there is now a coinsurance requirement placed for these treatments by HMO’s. • When a beneficiary needs to see a specialist the primary care physician, must refer the beneficiary out

14. Cont. of Disadvantages • HMOs also tend to operate in a specific geographical area and because HMOs operate in a limited geographical area, there may be limited coverage for treatment received outside the area. Usually only emergencies are covered. • In an HMO plan beneficiaries often have to wait longer for an appointment than they would with a fee-for-service plan.

15. X Poor XX Fair XXX Good XXXX Excellent

16. Dental & Vision coverage under HMO’s • Dental and Vision Coverage under an HMO plan is usually not through the same provider of the HMO. There is different dental and vision providers that sometimes work with HMO’s but operate separately.

17. PPO Preferred Provider Organization (PPO) is a plan that contracts with health care providers to provide certain medical services to its members at a discount fee. A health benefit plan with contracts between the sponsor and health care providers to treat plan members. A PPO can also be a group of health care providers who contract with an insurer to treat policyholders according to a predetermined fee schedule.

18. PPO PPOs can range from one hospital and its practicing physicians that contract with a large employer to a national network of physicians, hospitals and labs that contract with insurers or employer groups. PPO contracts typically provide discounts from standard fees, incentives for plan enrollees to use the contracting providers, and other managed care cost containment methods.

19. PPO • PPOs can range from one hospital and its practicing physicians that contract with a large employer to a national network of physicians, hospitals and labs that contract with insurers or employer groups. • PPO contracts typically provide discounts from standard fees, incentives for plan enrollees to use the contracting providers, and other managed care cost containment methods.

20. History of PPO • PPO highlights PPO insurance is a relatively new type of managed care plan. It was developed to combine the lower cost of managed care with the great degree of choice found in traditional health care. According to the American Association of Preferred Provider Organization, 54 percent of all Americans with health insurance now receive their health care through a preferred provider organization

21. History of PPO • Currently, nearly 112 million individuals are enrolled in a PPO program. This growth has been primarily the result of the fact that PPOs have delivered exactly what the public has called for zero choice, flexibility and a balance between the delivery of appropriate care and cost control.

22. Over the past few years, PPOs have steadily risen in popularity among employers and have experienced an increase in overall enrollment. According to the American Association of Preferred Provider Organizations, PPO enrollment in eligible employees rose from 98.3 million in 1998 to 106.8 million in 1999. The number of PPO plans operating in the U.S. in 2000 was 1,050, covering over 133 million lives. Latest Study

23. Average Employee Costs For Health Care2000-2003* 2000                      2003                     % Increase Employee Portion of Annual PremiumSingle Coverage             $334                      $508                          52% Family Coverage                $1,619                    $2,412                          49% PPO DeductiblesPreferred Provider                   $175                      $275                          57% Non-Preferred Provider         $340                       $561                        65% Prescription Drug Co-PaymentsPreferred Drugs                        $13                         $19                         46% Non-Preferred Drugs                 $17                         $29                         71%

24. Consumers Assessment of Health Plans Survey (CAHPS) for PPO plans

26. Advantages of PPO • Patients are not required to use a preferred provider but have freedom of choice every time they need care • Costs are lower if you stay within the network of providers • The level of benefits is higher for services from participating providers

27. Advantages of PPO • The freedom to seek medical care outside the network • Payment at 100 percent for most covered services once you’ve met your out-of-pocket maximum • No referrals needed or pre authorization for specialists

28. Disadvantages of PPO • Co-payments are higher compared to HMOs however, some employers and consumers are willing to sacrifice the higher level of cost savings of more structured managed-care plans for the increased flexibility. • PPO is generally the most expensive type of managed care plan

29. Disadvantages of PPO • If patients go outside the network, they will have to pay co-payments based on higher charges and they will need to meet the deductible • Members can expect paying co-insurance (co-insurance is usually waived and can be replaced with a low co-payment.)

30. Dental coverage under PPO • The costs involved in a PPO A define plan with a higher level of coverage if services are provided by a preferred provider. Discounts are negotiated and passed on to plan sponsors.

31. Dental coverage under PPO • What specifics are involved Most managed dental insurance plans work under a Preferred Provider Organization, which means that policyholders must choose a primary dentist from a list of approved dentists. And to maintain full coverage for all procedures, any specialist you see will have to be approved by this primary dentist.

32. Medical Savings Plan (MSP)

33. History of MSA The Health Insurance Portability and Accountability Act (HIPAA) was passed in Congress and signed by the President in 1996. As a result of this legislation a 4-year pilot program was created. This project was the Medical Savings Accounts (MSA). It began on January 1, 1997 and was restricted to the self-employed and small groups. The pilot project was extended until December 31, 2003.

34. Introduction The Medical Savings Account or MSA, is a special tax-sheltered personal savings or investment account that is maintained in conjunction with a high-deductible health insurance policy. The funds in the account may be used for medical services that aren’t covered by the participant’s high deductible policy.

35. How it works Instead of purchasing expensive insurance with a low deductible and low co-pays, the participant buys a low cost insurance policy with a high deductible. The amount saved from using the low cost insurance plan is then deposited in a MSA to cover the small bills that aren’t covered under the policy. The money in the MSA is 100% tax deductible. It can be accessed by check or debit card. What ever is not used for medical expenses will remain in the account and keep growing on a tax-favored basis. It can be used to cover future medical bills or supplement retirement, in this sense it is similar to an IRA. 

36. Advantages of MSA’s • Tax deductible • Balance can be rolled over • No minimum contribution • Works with other health care coverage

37. Disadvantages of MSA’s • Coverage changes • Coverage limitations • Restricted MSA plan

38. Other Coverage • Vision Care and MSA • Dental Care and MSA

39. Employee costs associated with MSA plan There are no income limits at this time that prevent wealthy people from making tax-deductible contributions to the MSA and using it as a way to accumulate tax-free earnings on investments.  Therefore, the higher the individual’s tax bracket, the greater the tax benefit an MSA provides. Although, there is no income limit there is an annual limit to the amount that can be invested.

40. Breaking News President Bush signed the new Health Savings Account legislation on December 8, 2003.  The new HSA have been referred to as the "next generation" of MSA plans. Many aspects of the program remain the same, however there are some important changes. One of the most significantly and arguably the most important is that ALMOST EVERYONE qualifies for the new HSA plans!

41. Key Changes in the new HSA • Lower deductibles are available • (1,000 single/2,000 family) • Up to 100% of the deductible amount can be contributed to the HAS • **MSA IS NOW HSA**

42. Point of Service, POS Definition Offers a full range of health services through a combination of HMO and PPO features. Members can elect to receive services under the defined managed care program or can go outside the network for care. If patients see a preferred provider, they pay little or nothing. Outside provider care is covered, but at a substantially higher deductible and co-payments.

43. Introduction to POS • The lesser known health care plan that combines the freedom of a PPO and offers the low cost of an HMO. • When you enroll in a POS you choose your primary care physician to monitor you health. • This physician has to be within the health care network and is considered your “point of service” • Is built into all managed health care plans and allows the individual the option.

44. Advantages of POS • Freedom to choose physicians in network or out of network • Emergency care coverage is covered no matter where you are in the US or worldwide • If you have to relocate temporarily because of a job assignment or a divorce, you will be covered under the Guest Privileges Program • Seeing a physician in network, you do not have to fill out any paper work, co-payments are low & there is no deductible • Annual out-of-pocket costs are limited

45. Advantages of POS Cont.

46. Costs of POS • Costs consists of a monthly premium and a co-payments • Less than a PPO because the health insurance company regulates most of your health care • Example, if you want to see a specialist, you must get a referral from your primary doctor • If your primary care physician chooses, they will probably choose from a specialist that works within the network • These controls reduces the overall cost of a POS health insurance plan

47. Disadvantages of POS • Seeing specialists may be difficult • Referrals to see physicians out of network may become difficult • Hospital visits charges by the physicians are considered out of network and charges by the hospital are covered in network. • When seeing physician out of network • Keep track of all information • Fill out all necessary paper work • High costs • Payments of deductibles must be taken care of before coverage can begin • Co-payments are based on usual, customary and reasonable charges

48. Vision Care In network Coverage • You can go through the VSP in-network or any other non-network provider • When making an appointment • You must select a VSP provider • Must make sure that it is time for an appointment, you can only get one check up a year • If glasses picked are not covered, you pay the full difference • No annoying forms to fill out

49. Vision Care Cont. Out of Network Coverage • VSP will reimburse you the amount allowed under your plan • Does not guarantee a full refund or satisfaction • You have to mail the bill • Must include VSP ID • Personal information • Relationship to the VSP member, if not a member

50. Example of Vision Care Benefits